Cal. Civ. Code § 32-31-3-9
"Security deposit" defined
Operative Text
Sec. 9. (a) As used in this chapter, "security deposit" means a deposit paid by a tenant to the landlord or the landlord's agent to be held for all or a part of the term of the rental agreement to secure performance of any obligation of the tenant under the rental agreement. (b) The term includes: (1) a required prepayment of rent other than the first full rental payment period of the lease agreement; (2) a sum required to be paid as rent in any rental period in excess of the average rent for the term; and (3) any other amount of money or property returnable to the tenant on condition of return of the rental unit by the tenant in a condition as required by the rental agreement. (c) The term does not include the following: (1) An amount paid for an option to purchase under a lease with option to purchase, unless it is shown that the intent was to evade this chapter. (2) An amount paid as a subscription for or purchase of a membership in a cooperative housing association incorporated under Indiana law.
Indiana Code § 32-31-3-9 establishes what counts as a 'security deposit' under Indiana's landlord-tenant security deposit law. The definition is intentionally broad: it covers not only the traditional upfront deposit held to secure a tenant's obligations, but also prepaid rent beyond the first full payment period and any above-average rent charges that are effectively returnable funds. Certain payments are explicitly excluded, such as option-to-purchase amounts under a lease-option agreement and cooperative housing membership fees, unless those payments are structured to evade the chapter's protections.
Plain English — not legal advice.
Under Ind. Code § 32-31-3-9, landlords and property managers should be aware that the legal definition of 'security deposit' extends beyond a simple move-in deposit. Funds collected as prepaid rent (other than the first full rental period) or rent charges that exceed the average rent for the term may be treated as security deposits and subject to all related statutory requirements, such as return deadlines and itemization rules. Operators generally structure their lease agreements carefully to distinguish legitimate option-to-purchase payments or cooperative membership fees from amounts that could be reclassified as security deposits.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Ind. Code § 32-31-3-9 defines 'security deposit' broadly, which means tenants may have protections over money collected by a landlord even if it was not labeled as a security deposit. If a landlord collected prepaid rent beyond the first month or charged above-average rent that was supposed to be returnable, those amounts may fall under Indiana's security deposit rules and the tenant may be entitled to the same return and accounting rights. Tenants who believe funds were misclassified to avoid these protections can raise that issue as a potential violation, consult a tenant-rights organization, or seek guidance from a local legal aid office familiar with Indiana housing law.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 14, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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